FEDERAL COURT OF AUSTRALIA
Seafolly Pty Ltd v Madden (No 5) [2014] FCA 1413
Citation: Seafolly Pty Ltd v Madden (No 5) [2014] FCA 1413 Parties: SEAFOLLY PTY LTD v LEAH MADDEN File number: VID 764 of 2010 Judge: TRACEY J Date of judgment: 23 December 2014 Catchwords: COSTS – costs of substantive proceeding – costs of stay application – exercise of discretion to award costs – consideration of success of the parties on the significant issues agitated at trial – consideration of conduct at trial – whether apportionment of costs appropriate – whether costs should be awarded on an indemnity basis – whether respondent entitled to interest on judgment pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) Legislation: Copyright Act 1968 (Cth)
Federal Court of Australia Act 1976 (Cth) s 51A
Federal Court Rules 2011 (Cth) rr 40.02, 41.03, 41.11
Trade Practices Act 1974 (Cth) ss 52, 53, 82Cases cited: Madden v Seafolly Pty Ltd (2014) 313 ALR 1 – cited
Madden v Seafolly Pty Ltd (No 2) [2014] FCAFC 49 – cited
Seafolly Pty Ltd v Madden (2012) 297 ALR 337 – cited
Seafolly Pty Ltd v Madden (No 2) (2013) 99 IPR 539 – cited
Seafolly Pty Ltd v Madden (No 3) [2013] FCA 316 – cited
Seafolly Pty Ltd v Madden (No 4) [2014] FCA 980 – citedDate of hearing: Heard on the papers Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 58 Solicitor for the Applicant/Cross-Respondent: K & L Gates Counsel for the Respondent/Cross-Claimant: Mr M J Collins QC and Mr I P Horak Solicitor for the Respondent/Cross-Claimant: Phillips Ormonde Fitzpatrick Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 764 of 2010
BETWEEN: SEAFOLLY PTY LTD
Applicant/Cross RespondentAND: LEAH MADDEN
Respondent/Cross-Claimant
JUDGE:
TRACEY J
DATE OF ORDER:
23 DECEMBER 2014
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The respondent pay 85% of the applicant’s costs of the proceeding.
2.The costs of the respondent’s interlocutory application filed on 26 February 2013 be costs in the cause.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 764 of 2010
BETWEEN: SEAFOLLY PTY LTD
Applicant/Cross-RespondentAND: LEAH MADDEN
Respondent/Cross-Claimant
JUDGE:
TRACEY J
DATE:
23 DECEMBER 2014
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
This proceeding has a long history in the Court. It was commenced in 2010 by the applicant (“Seafolly”) after the respondent, Ms Leah Madden, had posted material on her personal Facebook page in which she, in substance, alleged that Seafolly had copied some of her swimwear designs which were marketed under the White Sands label. She also alleged that an employee of Seafolly had been sent to a private showing and had taken photographs of White Sands costumes with a view to them being copied by Seafolly.
Seafolly responded by issuing two press releases in which it branded Ms Madden’s allegations as…
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- Case
- [2014] FCA 1413
- Decision Date
CaseChat Overview and Summary
The key legal issues were the exercise of the trial judge’s discretion in awarding costs, whether an apportionment of costs was appropriate, whether costs should be awarded on an indemnity basis, and whether Ms Madden was entitled to interest on judgment. The trial judge considered the principles guiding the exercise of the Court’s discretion in awarding costs and the conduct of the parties during the trial and appeal. The trial judge decided that Seafolly should be awarded the costs of the substantive proceeding on an 85:15 basis, in line with the Full Court’s earlier decision. The trial judge also decided to award the costs of Ms Madden’s interlocutory application to Seafolly as costs in the cause. Finally, the trial judge rejected Ms Madden’s application for interest on judgment on the basis that the judge’s original order had not considered this issue and that the statutory power to order interest on judgment was limited to the period before judgment was entered.
Orders
Orders of the court
1. The respondent pay 85% of the applicant’s costs of the proceeding.
2. The costs of the respondent’s interlocutory application filed on 26 February 2013 be costs in the cause.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
In Seafolly Pty Ltd (No 2) I set out the principles which guide the exercise of the Court’s discretion in awarding costs generally and also in cases where apportionment is sought and Calderbank offers have been made. I do not repeat what I there said. I have, however, had regard to those principles in dealing with the competing costs claims which have now been made.CONSIDERATIONCosts of the trial Once the outcome of the trial was known I determined that the usual order for costs should be made in favour of Seafolly. In doing so I was mindful of Seafolly’s mixed success in prosecuting its claims and its complete success in defending Ms Madden’s cross-claim. Ms Madden had limited success on her appeal. The Full Court found that she had not acted maliciously when she made false and misleading allegations against Seafolly and some of its staff. As a result the Full Court allowed the appeal in part, set aside my costs order and remitted the matter for an assessment of damages on the cross-claim. In the Full Court Ms Madden had sought to challenge all the adverse findings which had been made against her at first instance. For the most part she was unsuccessful in this endeavour. This led the Full Court to observe that:“… while Ms Madden did have some success on appeal, most of the substantive issues that were argued as to her liability were resolved adversely to her. Those issues took up the vast bulk of the submissions and hearing of the appeal and Ms Madden vigorously pressed them. Had she confined her case on appeal to the issues on which she succeeded the position would have been different. Having raised multiple, complex issues on which she failed, we are of the opinion that Ms Madden should pay 85% of the costs of the appeal.”See: Madden (No 2) [2014] FCAFC 49 at [12]. The “multiple, complex issues” on which Ms Madden failed were those which arose in the context of Seafolly’s Trade Practices Act claims against her and her claim to have been defamed by Seafolly. The position, following the Full Court’s decision, is that:·Seafolly has succeeded in its claims under ss 52 and 53(a) of the Trade Practices Act and obtained declaratory relief, injunctive relief and $20,000 in damages;·Seafolly’s copyright infringement and injurious falsehood claims both failed;·Ms Madden succeeded in her cross-claim against Seafolly for breach of s 52 of the Trade Practices Act and obtained declaratory relief and $40,000 in damages; and·Ms Madden failed in her cross-claim against Seafolly for defamation. In these circumstances both Seafolly and Ms Madden claimed to have been the more successful party. Seafolly did so on the basis that it had been substantially successful in vindicating its reputation and that of its employees whom it had been alleged were involved in the copying of White Sands designs. Ms Madden, on the other hand, emphasised monetary aspects of the case. She had received twice the quantum of damages which had been awarded to Seafolly and Seafolly had only received $20,000 despite having mounted a claim for $2,250,000.